Authorities in a number of countries have taken action in the last few days in connection with a long-running scandal surrounding Malaysia’s state development fund, known as 1MBD, (1Malaysia Development Bhd).
In Singapore, the government seized some S$240m (US$177m) in assets, as part of an ongoing local investigation into possible money laundering by some of the city-state’s biggest banks, the Monetary Authority of Singapore said on Thursday, in a joint statement on its website, in conjunction with other key Singaporean agencies.
The MAS said problems had also been found at a number of its major banks, including DBS Group Holdings Ltd, the world’s largest private bank UBS AG, and UK-based, Asia-focused Standard Chartered.
“The preliminary findings are that there were instances of control failings in all three [of these] banks and, in some cases, weaknesses in the processes for accepting clients and monitoring transactions. There was also undue delay in detecting and reporting suspicious transactions,” the MAS statement noted.
Previously-cited problems at BSI Bank, which led the MAS to withdraw its status as a merchant bank in May, were also mentioned.
According to the Reuters news agency, today’s statement was “the first time 1MBD… has been mentioned by the Singapore authorities in official statements about the money laundering investigation”, even though other countries had done so previously in connection with what were clearly related investigations.
Separately, US federal prosecutors on Wednesday said they had filed suit in an effort to seize more than US$1bn in assets, ranging from expensive properties to a private jet, from people connected to Malaysia’s prime minister, Najib Razak.
According to The New York Times, the properties included a US$30.6m penthouse at the Time Warner Center in Manhattan, overlooking Central Park; a US$39m mansion in the Los Angeles hills; and a US$17.5m “tear-down” in Beverly Hills, all of which had been “bought anonymously, the financing source hidden”.
Media observers said the haul, if it were to go through, would represent the Justice Department’s anti-corruption unit’s largest asset seizure ever.
The NYT article went on to noted that the story told by federal prosecutors in their explanation of the seizure represented “the most scathingly detailed version yet” of the alleged misappropriation of funds from the Malaysian sovereign wealth fund, although other press reports noted that none of the US lawsuits actually named Najib personally. According to the NYT, Najib’s stepson, Hollywood film producer Riza Aziz, was among those named by the Justice Department, along with two Najib associates.
1MDB and the Malaysian prime minister’s office had no immediate comment, the media reports said.
Najib set up 1Malaysia Development Bhd in 2009, with the idea, it was said at the time, of helping to make Kuala Lumpur a world-class financial hub, and in so doing, boost Malaysia’s economy.
To view a video of US attorney general Loretta Lynch announcing the filing of civil complaints aimed at seizing more than US$1bn in assets linked to the 1MBD fund, click here.